27 September 2012 10:12
Foodservice group Compass has said that its expectations for the full year remain positive and unchanged following a strong set of results led by its North American division. However, the company added that it would be cutting back on its operations in southern Europe to mitigate the challenging conditions. The group said that it expects revenues and operating profits for the current financial year, which ends on September 30th, are expected to be approximately 8%, with organic revenue growth in the region of 5.5%. This has been led by "excellent growth" in North America and its fast growing and emerging markets, which include Australia, Brazil, Turkey, other parts of Latin America and India.Full-year organic revenue in North America is expected to be up by over 8%, with revenue in fast growing & emerging markets over 12%. Meanwhile, the group said that economic conditions, particularly in southern Europe, continued to decline and that it had embarked upon a programme designed to "manage challenging economic conditions" and position the company for future growth. This includes the restructuring of its southern Europe operations in order to streamline operations and re-base the business. The group expects to deliver cost savings of £95 million by 2014. Overall, the group said that its prospects remain strong, with no change to 2012/13 expectations. Richard Cousins, group chief executive, said: "Trading in the fourth quarter has been good and, in line with our expectations, organic revenue growth will be around 5.5% for the full year. The positive trading momentum in North America and Fast Growing & Emerging has continued and the outlook in both regions is encouraging. The fundamentals of the European business remain solid, but we are taking decisive action to protect profitability in the immediate future and improve operational efficiency over the medium term. Overall, the prospects for the business around the world are good and I remain confident that we will continue to drive revenue and margin growth."